| Listed companies in foreign country tend to pay dividends to investors, and from 1990's the cash dividends has become the main distribution form in developed countries, so the payout ratio is higher and policy continuity is stronger. Dividend policy has been a hot research point in abroad, in the past 50 years, the dividend theory has been developed from different angle and level, but scholars can't fully explain the dividend puzzle.Compared with the foreign companies, the dividend distribution has the following salient features in China. First, the stock dividend distribution ratio gradually decreased, cash dividends become the main distribution form. second, the non distribution phenomenon is still very serious; symbolic dividend is a very serious problem, every year, the cash dividend pay ratio of many companies is less than 0.1 yuan per share; overrun cash dividend distribution phenomenon is severe, many listed companies distribute cash dividends out of the earnings and cash flow; cash dividend isn't persistent.Most of the existing literature is testing the applicability of Western dividend theory based on the data of native stock market, one important aspect is the test of signal theory, a lot of the researches find that cash dividend has no, but the stock dividend is welcomed due to Significant signaling mechanism. Scholars find many factors have impact on cash dividend, such as the company's financial position, ownership structure. current and previous period's dividend policy, ability to refinance, but the research from perspective of accounting earnings persistence is rare. Traditional dividend theory can't actually explain the famous "dividend puzzle", so scholars are trying to find new research breakthrough. such as the life-cycle theory. This article combine accounting earnings persistence and cash dividend policy with corporate life-cycle theory, on the one hand the research can make up for the lack of existing research because it combine the company's own features with the external environment. on the other hand the article can help listed companies to have a deeper understanding of dividend policy and provide theoretical guidance for the investors, these can promote the healthy development of Chinese stock market. This paper consists of six parts:the preface puts forward the entry point through summing up the research achievements of dividend policy in china, the literature review summarizes the relevant literature to support the full article and illustrates the signaling theory, agency cost theory and the corporate life-cycle theory, and defines the relevant concept, in the overview of cash dividends the paper analyses the distribution characteristics of our country from 1991-2010 using descriptive statistics, the research hypothesis proposes three basic hypothesis and the designs the needed variables, the empirical part tests the three hypothesis using multiple linear regression model, Logist regression model and Tobit regression models, the last part summarizes the empirical research and the full text to present the research insufficient and future research directions.The main conclusions of this paper are as follows:Firstly, this study finds that regardless of what the life-cycle stage the company is in, the company paid cash dividend its persistence of earnings and earnings'components is significantly stronger than the company unpaid cash dividend, in the mature stage even higher than the company paid stock dividend and mixed dividends, it demonstrates that cash dividend has significant signal effect from the perspective of accounting earnings persistence, cash dividend delivers the company's future operating results. This conclusion greatly enriches the research results about signal effect of cash dividends, provide a strong theoretical support for listed companies to pass future results using cash dividend, provides a theoretical guidance for investors to choose investment targets, but also provides a theoretical basis for securities market to develop the regulatory policy.Secondly, the research finds that overrun cash dividend distribution phenomenon is severe, the results of assumption 3 prove that overrun cash dividend distribution does not have a significant positive persistence of earnings and earnings'components,the companies paying high dividends even show significant negative persistence in early and degenerating stage, overrun cash dividend distribution can not deliver future performance and even undermine the company's future performance, it results in misleading to investors and unhealthy development of China's securities market.Thirdly, nominal cash dividend distribution problem is serious, the results of assumption 3 testify that companies paid nominal dividend generally have a significant negative persistence of earnings and earnings'components, the conclusion shows that listed companies pay nominal dividend in order to meet the need of market regulation is unmatched with their own future performance and even contrary to future performance, so nominal cash dividend distribution did not play a role of protecting small and medium investors.Fourthly. the results of assumption 1 show that no matter what the life-cycle stage the company is in, accounting earnings persistence will affect the probability of paying cash dividend, in early and growth stage it will impact the company's cash dividend payment ratio, accounting earnings persistence as a measure for capacity of future development has a wide variety of influences on designing financial management strategy, the results of assumption 3 testify that the companies making cash dividend policy in accordance with future performance have stronger persistence of earnings and earnings'components.Fifthly, cash dividend policy has certain characteristics of the life-cycle, different life-cycle affects the company's cash dividend policy, different life-cycle with different dividend policy have different characteristics in accounting earnings persistence, so life-cycle has an important influence on dividend policy, listed companies need to fully consider the characteristics of life-cycle. |
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